Velo, clearly something is happening, but I think that while our medium term outlook are similar (after this decline runs its course in two three weeks, I have a massive run up), longer term I believe we are starting to see the initial set up for the next bear. As for that specific triangle and the new "configuration", surely, today's action was not of such great import, the reaction low of mid January (10341) is still far and unchallenged on the dow. Apart of an extremely oversold (short term) and an equity P/C ratio finally getting up there, very short term (next two weeks or three), the down side pattern is intact. The oversold condition could easily be corrected by a minor ramp (I have the possibility of reaching 2045 on a counter move here) in two or three days.
Longer term, note for instance that BPNDX has not been that low since April, with only 51% of the NDX now with bullish patterns. The BPSPX however still up there well above 80 (as is the BPINDU and BPOEX, the larger NYSE stocks). Clearly we are starting to see divergence between the high quality issues and the lower quality Naz issues. A typical sign of an aging bull. A bull like that takes some time to die (and thus my suggestion in #msg-2000425 (from 12/25/03) that a toping action through the summer and possibly early autumn will ensue), and that divergence will be further amplified (as I said there, the Naz may make a high in early summer and then trade in a range, while the Dow keep marching for a little longer) during the summer.
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